American Apparel has warned thousands of its Southern California workers that layoffs may be coming in January. (Al Seib / Los Angeles Times)

Shan Li December 5, 2016

American Apparel has told nearly 3,500 employees in Southern California that they may lose their jobs in January depending on the outcome of a likely sale to Canadian clothing maker Gildan Activewear.

The maker of colorful basics, which in November filed for bankruptcy for the second time, has notified workers at three American Apparel production facilities that they could be laid off Jan. 6, according to the California Employment Development Department. The message went to 332 workers in Garden Grove, 959 workers in South Gate and 2,166 workers at the company’s sprawling headquarters in downtown Los Angeles.

If all of these workers lost their jobs next year, it would be a huge blow to Southern California apparel manufacturing, which has steadily declined over the years, analysts said. This year, American Apparel laid off at least 500 workers as it cut production.

“It’s a big number,” said Craig Johnson, president of consumer research firm Customer Growth Partners. “There are not a ton of U.S. large-scale apparel manufacturers left.”

American Apparel said Monday that the state-mandated WARN notices were “purely a legal precaution” and that “layoffs are not certain.”

Gildan Activewear, which bid $66 million to acquire American Apparel’s intellectual property rights and some other assets, has indicated its interest in maintaining at least a portion of manufacturing in the U.S.